x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ________________ to ______________

Commission file number: 000-53756

BLASTGARD INTERNATIONAL, INC.

(Exact name of small business issuer as specified in it charter)

Colorado

84-1506325

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

2451 McMullen Booth Road, Suite 242, Clearwater, Florida 33759-1362

(Address of principal executive offices)

(727) 592-9400

(issuer’s telephone number)

(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T during the 12 preceding months (or such shorter period that the registrant was required to submit and post such file). Yes x No o

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer o Accelerated Filer o

Accelerated Filer o Smaller Reporting Company x

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

As of November 10, 2011, the issuer had 86,386,036 shares of $.001 par value common stock outstanding.

The accompanying notes are an integral part of these financial statements.

3

BlastGard International Inc.

Statement of Operations (unaudited)

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

2011

2010

2011

2010

Revenues

$

170,967

$

43,315

$

194,260

$

87,698

Direct costs

137,984

31,165

160,115

65,584

Gross Profit

32,983

12,150

34,145

22,114

Operating expenses:

General and administrative

541,065

45,758

1,318,536

249,240

Research and Development

83

-

1,274

888

Amortization and depreciation

64,876

539

202,567

1,648

Total operating expenses

606,024

46,297

1,522,377

251,776

Operating loss

(573,041

)

(34,147

)

(1,488,232

)

(229,662

)

Non-operating activity

Other income (expense)

6,355

-

8,642

7,089

Gains (losses) on settlement of debt

-

248,754

-

Gain (loss) on derivative liability

732,710

492,366

-

Gain (loss) on settlement of assets

98,385

98,385

Interest expenses

(450,505

)

(29,572

)

(1,345,154

)

(60,879

)

Interest income

1

1

Total other income (expense)

386,946

(29,572

)

(497,006

)

(53,790

)

Loss before income taxes

(186,095

)

(63,719

)

(1,985,238

)

(283,452

)

Minority interest loss

347

(9,234

)

Provision for income taxes

-

-

-

-

Net loss

$

(186,442

)

$

(63,719

)

$

(1,976,004

)

$

(283,452

)

Earnings (loss) per share:

Basic

$

(0.00

)

$

(0.00

)

$

(0.03

)

$

(0.01

)

Dilutive

$

(0.00

)

$

(0.00

)

$

(0.02

)

$

(0.01

)

Weighted average shares outstanding

Basic

84,754,168

50,586,142

74,684,369

50,512,068

Dilutive

96,968,454

50,586,142

86,898,655

50,512,068

The accompanying notes are an integral part of these financial statements.

4

BlastGard International Inc.

Statement of Stockholders' Deficit

Common

Additional Paid in

Minority

Accumulated

Stock-Holders'

shares

Par

Capital

Interest

Deficit

Deficit

Balance at December 31, 2009

50,086,142

50,086

12,351,249

—

(13,204,719

)

(803,384

)

Board member compensation

500,000

500

49,500

50,000

Sale of stock

5,500,000

5,500

159,500

165,000

Net loss

(463,613

)

(463,613

)

Balance at December 31, 2010

56,086,142

56,086

12,560,249

—

(13,668,332

)

(1,051,997

)

Sale of stock

5,833,334

5,833

169,167

175,000

Stock issued for acquisition of HighCom

Security

9,820,666

9,821

481,179

491,000

Stock issued for conversion of debt

7,812,561

7,813

226,564

234,377

Stock issued for consulting

6,333,333

6,333

203,667

210,000

Stock issued for Acer payable

500,000

500

24,500

25,000

Options issued for compensation

327,944

327,944

Record discount on new loans

464,810

464,810

Reclassify minority interest

35,307

(35,307

)

—

Net loss

(9,234

)

(1,976,004

)

(1,985,238

)

Balance at September 30, 2011

86,386,036

$

86,386

14,493,387

(44,541

)

(15,644,336

)

$

(1,109,104

)

The accompanying notes are an integral part of these financial statements.

5

BlastGard International Inc.

Statement of Cash Flows (unaudited)

For the Nine Months Ended

September 30,

2011

2010

Cash Flows from Operating Activities:

Net (loss) income

$

(1,976,004

)

$

(283,452

)

Adjustment to reconcile Net Income to net cash provided by operations:

Minority interest loss

(9,234

)

Depreciation and amortization

202,567

1,648

Amortization of debt discount

1,230,953

Discount on debt

(464,810

)

Stock given for interest

210,000

Other stock comp

327,944

50,000

Gain on conversion of debt

(248,754

)

Gain on disposal of equipment

(6,465

)

gain on derivative

(492,366

)

Changes in assets and liabilities:

Accounts receivable

55,880

(30,687

)

Note receivable

(15,892

)

-

Inventory

(19,560

)

16,516

Other operating assets

68,078

(398

)

Accounts payable and accruals

316,525

274,178

Related party loans

84,282

(4,611

)

Net Cash (Used) Provided by Operating Activities

(736,856

)

23,194

Cash Flows from Investing Activities:

Purchase of property and equipment

(11,880

)

-

Payments for deferred costs

(6,429

)

(24,423

)

Proceeds from sales of assets and intangibles

3,900

-

Cash purchased

650

-

Net Cash Used by Investing Activities

(13,759

)

(24,423

)

Cash Flows from Financing Activities:

Proceeds from issuance of stock

175,000

-

Proceeds from issuance of note payable

760,000

-

Net proceeds from line of credit

-

572

Repayments of notes payable

(184,655

)

-

Net Cash Provided by Financing Activities

750,345

572

Net increase/decrease in Cash

(270

)

(657

)

Cash at beginning of period

46,382

1,739

Cash at end of period

$

46,112

$

1,082

Supplemental cash flow information:

Interest paid

$

69,653

$

14,172

Taxes paid

$

-

$

-

The accompanying notes are an integral part of these financial statements.

6

BLASTGARD INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(1) Operations and Basis of Presentation

BlastGard International, Inc. (the “Company”) was incorporated on September 26, 2003 as BlastGard Technologies, Inc. (“BTI”) in the State of Florida, to design and market proprietary blast mitigation materials. The Company created, designs, develops and markets proprietary blast mitigation materials. The Company’s patent-pending BlastWrap® technology effectively mitigates blast effects and suppresses post-blast fires. The Company sub-contracts the manufacturing of products to licensed and qualified production facilities.

The Company went public through a shell merger on January 31, 2004. On March 31, 2004, the Company changed its name to BlastGard International, Inc. On March 4, 2011, the Company completed the acquisition of HighCom Securities, Inc and subsidiaries (HighCom). The income of HighCom and subsidiaries is included from January 25, 2011, the date of the binding letter of intent. These financial statements include the assets, liabilities and activity of the following:

BlastGard International, Inc. BlastGard® International, Inc. is a Colorado corporation, that has developed and designed proprietary blast mitigation materials. The Company operates from offices in Clearwater, Florida and uses contract manufacturers in various locations for production.

BlastGard Technologies Inc. is a dormant Florida corporation.

HighCom Securities, Inc. HighCom Securities, Inc. (HighCom), originally located in San Francisco California, is a global provider of security equipment and a leader in advanced ballistic armor manufacturing. The Company uses contract manufacturers for production and has moved the corporate offices to Clearwater, Florida as of May 1, 2011.

HighCom Online, Inc. HighCom Online Inc. is an online outlet for HighCom Security products. The Company operated out of the HighCom offices.

HC Ballistics, LLC HC Ballistics LLC was a joint venture with a related party to produce products for HighCom customers. The Company operated out of HighCom offices and used a production facility in South Florida. The agreement with the related party is currently terminated. HC Ballistic LLC was closed effective December 31, 2010. The results of operations for 2010 are included in the pro-forma presentation on the consolidated entity.

All material intercompany transactions have been eliminated.

The unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto, included in the Company’s latest Form 10-K.

In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair statement of the financial position at September 30, 2011 and the result of operations and cash flows for the three and nine months ended September 30, 2011 and 2010 have been made. Operating results for the nine months ended September 30, 2011 and 2010 are not necessarily indicative of the results that may be expected for the entire year.

Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has incurred recurring losses and has used significant cash in support of its operating activities. These factors, among others, may indicate that the Company will be unable to continue as a going concern.

7

The financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern was dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. The Company plans to generate the necessary cash flows with increased sales revenue over the next 12 months. However, should the Company’s sales not provide sufficient cash flow; the Company has plans to raise additional working capital through debt and/or equity financings. There was no assurance the Company will be successful in producing increased sales revenues or obtaining additional funding through debt and equity financings.

Recent Accounting Pronouncements

We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration. Reference is made to these recent accounting pronouncements as if they are set forth therein in their entirety.

(2)

Notes Payable

Convertible Promissory Notes

On December 2, 2004, the Company entered into agreements to borrow an aggregate principal amount of $1,420,000 and to issue to the investors secured convertible notes and common stock purchase warrants. The Company’s convertible promissory notes payable consist of the following at September 30, 2011 and December 31, 2010:

At September 30, 2011, all warrants associated with the above debt had expired.

8

New Financing

Alpha Capital Aktiengesellschaft (“Alpha”), a holder of 2004 Debt, loaned the Company $160,000 in February 2011, $300,000 in March 2011 and an additional $300,000 in June 2011 pursuant to secured notes convertible at the lesser of the applicable conversion price or eighty percent of the conversion price of any convertible note issued by the Company to anyone prior to or on the one year anniversary of the Issue Date of the Note, subject to adjustment as described therein. The February 2011 notes had a conversion price of $.03 per share and the March 2011 notes had a conversion price of $.05 per share. The Notes are accompanied by the issuance of five year warrants to purchase 8,000,000 shares at an exercise price of $0.03 per share, five year warrants to purchase 9,000,000 shares at an exercise price of $0.08 per share and five year warrants to purchase 12,333,335 shares at an exercise price of $0.06 per share, respectively. See “Note 12.”

Conversion of Accrued Expenses.

On March 8, 2011, BlastGard’s Board of Directors ratified, adopted and approved that James F. Gordon’s accrued salary of $160,000 (20 months at $8,000 per month covering May-December 2009, January-October 2010 and January-February 2011); Michael J. Gordon’s accrued salary of $160,000 (20 months at $8,000 per month covering May-December 2009, January-October 2010 and January-February 2011); and Morse & Morse, PLLC’s accrued legal bill of $67,025.30 be converted into a Convertible Non-Interest Bearing Demand Note, convertible into Common Shares of BlastGard at $.05 per share at the Noteholder(s) discretion. On May 3, 2011, BlastGard’s Board of Directors ratified, adopted and approved $100,000 in additional compensation to Michael J. Gordon as CEO, of which $50,000 be converted into a Convertible Non-Interest Bearing Demand Note, convertible into Common Shares of BlastGard at $.05 per share at the Noteholder(s) discretion and $50,000 issued in Common Stock at $.05 per share.

The 2011 convertible promissory notes consisted of the following at September 30, 2011 and December 31, 2010:

The Company issued 29,333,335 warrants with the convertible debt, above. These warrants are exercisable at $0.03 for 8,000,000, $0.08 for 9,000,000 and $0.06 for 12,333,335 and expire in 5 years. The warrants were valued, using the Black-Scholes method, at approximately $1,734,109. These warrants have created a derivative liability in the amount of $1,734,109. This liability is included in other assets on the balance sheet. See “Note 12.”

The Company has a line of credit with a local bank. The Company also acquired various revolving credit facilities in the acquisition of HighCom Security, Inc. HighCom had been paying interest only on the loans. Two of these loans are not transferable and all have been called by the lenders. The revolving credit facilities consist of the following at September 30, 2011 and December 31, 2010:

(Unaudited)

September 30, 2011

December 31, 2010

$100,000 line of credit from Regions Bank, interest only at 8% annually, due on demand

$

90,971

$

95,380

$450,000 line of credit from Fifth Third Bank, interest only at prime plus 3% annually, due on demand

Three credit card accounts with major financial institutions varying monthly minimum payments including interest due on demand

65,234

-

779,786

95,380

Less: current maturities

(779,786

)

(95,380

)

$

-

$

-

Acquisition note

The Company issued a note in the amount of $196,400 as part of the acquisition of HighCom Security, Inc. to the former majority shareholder. The Company has stopped making payments on this note directly to the former majority shareholder and has applied the unpaid balance of $156,400 against receivables due from the former shareholder that were also acquired in the purchase transaction.

10

(3)

Subordinated Convertible Notes Payable

On June 22, 2006, the Company entered into agreements to borrow an aggregate principal amount of $1,200,000 and to issue to the investors’ subordinated, convertible promissory notes and common stock purchase warrants. On January 25, 2011, the Company entered into an agreement to settle the outstanding debt, accrued interest and all outstanding warrants for $130,000.

The Company is authorized to issue 1,000 shares of $.001 par value preferred stock. The Company may divide and issue the Preferred Shares in series. Each Series, when issued, shall be designated to distinguish them from the shares of all other series. The relative rights and preferences of these series include preference of dividends, redemption terms and conditions, amount payable upon shares of voluntary or involuntary liquidation, terms and condition of conversion as well as voting powers.

Common stock issuances

On January 24, 2011, the Company sold 4,166,667 shares to an unrelated party for $125,000.

On January 25, 2011, the Company issued 866,667 shares of common stock in lieu of preferred shares authorized by the board in December, 2010 for the first $26,000 of investment by Phoenix Alliance, a related party.

On March 4, 2011, the Company issued 9,820,666 shares as part of the acquisition of HighCom Security, Inc. and subsidiaries.

11

On April 18, 2011, the Company issued 800,000 shares of common stock in lieu of preferred shares authorized by the board in December, 2010 for the $24,000 of additional investment by Phoenix Alliance, a related party.

On May 3, 2011, the Company issued 1,000,000 shares of common stock authorized by the board in May 2011 as additional compensation in the amount of $50,000 to Michael J. Gordon as CEO.

On May 10, 2011, the Company issued 3,333,333 shares of common stock in lieu of preferred shares authorized by the board in December, 2010 for services rendered in connection with performance of BlastGard’s due diligence investigation of HighCom by Phoenix Alliance, a related party. This transaction was valued at $100,000.

On June 1, 2011, the Company issued 2,889,617 shares of common stock for the conversion of $86,689 in debt and accrued interest.

On June 3, 2011, the Company issued 4,782,915 shares of common stock for the conversion of $143,487in debt and accrued interest.

On June 16, 2011, the Company issued 140,029 shares of common stock for the conversion of $4,201 in debt and accrued interest.

On August 3, 2011, the Company issued 500,000 shares of common stock for the conversion of $25,000 in note payable for the Acer product acquisition.

On September 5, 2011, the Company issued 2,000,000 shares of common stock as inducement to allow other financing. The Company recorded $60,000 in consulting expense on the issuance of the stock.

Stock Compensation

The Company periodically offered options to purchase stock in the company to vendors and employees.

Options are granted at the fair market value of the stock on the date of grant. Options generally become fully vested after one year from the date of grant and expire five years from the date of grant. During the years ended December 31, 2010 and 2009 no options were granted and 766,667 options expired when sales goals were not met and 570,000 other options expired un-exercised.

On January 28, 2011, a total of 6,250,000 options were granted to five individuals for services rendered. The options vested immediately and the Company recognized $310,230 in compensation costs at the grant date.

On May 5, 2011, a total of 300,000 options were granted to an employee for services rendered. The options vested immediately and the Company recognized $17,714 in compensation costs at the grant date.

There are no net cash proceeds from the exercise of stock options during the nine months ended September 30, 2011. At September 30, 2011 and December 31, 2010, there is no unrecognized compensation cost related to share-based payments which is expected to be recognized in the future.

The total grant date fair value of options vested during the three months ended September 30, 2011 was $327,944.

(5) Line of Credit

The Company borrowed approximately $92,950 against its $100,000 credit line, which is secured by a personal guarantee of its Chief Financial Officer. Currently, $90,971 is owed pursuant to the line of credit (inclusive of interest at 5%) at September 30, 2011.

(6) Income Taxes

The Company incurred net operating losses during all periods presented resulting in a deferred tax asset, which is fully allowed for; therefore, no income tax benefit or expanse has been presented.

(7) Commitments and Contingencies

Office Lease

The Company entered into a lease agreement in January 1, 2009 for office space in Clearwater Florida. Rental payments under the lease are $300 per month on a month to month basis. A second office space in Clearwater, FL at $285.00 per month was added in May 2011. From February through April 2011, the Company was also paying for office space in San Francisco, California at monthly rate of $15,000. The San Francisco office was closed at the end of April 2011. In February 2011, the Company entered into a six month lease agreement for approximately 11,200 square feet of office and warehouse space in Columbus, OH for $3,000 per month. This lease was a month to month basis at September 30, 2011. In May 2011, the Company entered into a month to month lease for approximately 300 square feet of office space in Aurora, CO for $320 per month.

Rent expense for three and nine months ended September 30, 2011 and 2010 is approximately $37,725 and $2,700 respectively.

13

Prior Litigation Matter

Verde Partners Family Limited Partnership

On April 2, 2009, the Company entered into a Settlement Agreement to settle our outstanding civil litigation. The Company will pay the sum of $125,000 over 18 months. The first monthly payment is paid within 30 days after the Defendants deliver to the Company’s counsel an original executed version of the Agreement and a promissory note in the amount of the remaining principal balance to bear interest in the amount of 6% per annum. Upon Verde’s receipt of the payment and promissory note, the parties shall jointly dismiss with prejudice all litigation between them, including the Pinellas County action and the Federal action. The company and Verde also entered into a license agreement whereby BlastGard obtains a fully paid up non-exclusive license for the 2 Verde patents for the remaining life of those patents in exchange for the Company paying Verde a 2% royalty for the life of the patents, on the sales price received by BlastGard for BlastGard’s portion of all blast mitigation products sold by the company (the royalty is not on any third-party’s portion of any product containing blast mitigation products sold by BlastGard). The parties also agreed not to file any complaints with any state, federal or international agency or disciplinary body regarding any of the other parties or any person affiliated with any of the other parties or otherwise make negative statements about them (in other words, a broad non-disparagement clause). The company and Verde also signed mutual general releases (excepting the obligations above) and a covenant not to sue. At September 30, 2011, the Company is in arrears on the final twelve monthly payments on the settlement and a Notice of Default was filed on July 13, 2011.

Acquisition of HighCom Security

The Company has recorded a contingent liability in association with the purchase of HighCom Security. The Company is liable for certain payments of additional cash and stock to the seller on a pro rata basis based on sales projections. At the time of the purchase, management believed the Company could achieve 68% of the stated goals and recorded the estimated liability at 68% of the total possible under the terms of the sale agreement. As of September 30, 2011, management has no information to change this estimate.

Future Financing Contingencies

The Company is seeking financing. Our Agreements with the current Note holder states that in the event of default, change in control, change in a majority of directors and in the most recent Note investment of $300,000 a change in CEO would trigger a mandatory redemption of the Notes at 120% of the balance of the Notes and a buy out of their Warrants based upon a valuation of the Warrants as provided in the Agreement, which could be substantial.

(8) Inventory

The Company’s manufacturing is sub-contracted to licensed and qualified production facilities. Our inventory is made up of raw materials, work in progress and finished goods. Our inventory is maintained at

our manufacturing facilities.

September 30,

December 31,

2011

2010

(unaudited)

Raw materials

$

366,807

$

17,370

Work in process

-

-

Finished Goods

31,371

33,920

TOTAL

$

398,178

$

51,290

14

(9) Intangibles

The Company has capitalized certain costs associated with patents, trademarks, purchased customer lists and website and product designs. The costs are amortized on a straight-line basis over the expected life of the intangible normally between 3 and 15 years. The intangible assets consist of the following:

September 30, 2011

December 31, 2010

Customer list

$

500,000

$

-

Product designs

55,000

-

Websites

80,000

-

Patents

28,651

28,651

Trademarks

335

335

663,986

28,689

Accumulated amortization

135,412

4,642

$

528,574

$

24,344

Future amortization:

2011

$

99,466

2012

198,932

2013

166,710

2014

5,599

2015 and thereafter

50,407

$

526,714

(10) Acquisition of HighCom Security, Inc.

On January 25, 2011, the Company agreed to purchase 100% of the outstanding stock in HighCom Security, Inc. (HighCom) from an unrelated party for cash, stock common and preferred stock to be paid out at certain milestones. As of the signing of the agreement, BlastGard International, Inc. immediately assumed the operations of HighCom and started to provide financing for the operations while a definitive agreement is drawn up over the next 90 days.

On March 4, 2011, the Company issued notes in the amount of $196,400 note and issued 9,820,666 shares of common stock as initial consideration for 98.2% of the outstanding stock of HighCom Security, Inc. and promised up to another $100,000 in cash and 35,000,000 shares of common stock based on a pro-rata basis if revenue reaches certain goals. BlastGard management believes that the revenues goals are very achievable and have valued the contingent consideration at 68% of the market price at the time of the agreement.

The Company filed HighCom’s audited financials for the years ended December 31, 2010 and December 31, 2009 via a Form 8K on May 20, 2011. BlastGard International, Inc. accounted for the assets, liabilities and ownership interests in accordance with the provisions of ASC 805, Business Combinations for acquisitions occurring in years beginning after December 15, 2008 (formerly SFAS No. 141R, Business Combinations). As such, the recorded assets and liabilities acquired have been recorded at fair value and any difference in the net asset values and the consideration given has been recorded as a gain on acquisition or as goodwill. The audited values as of the date of agreement are as follows:

15

Cash

$

834

Accounts receivable

116,910

Contract performance bonds

50,500

Inventory

219,233

Related party loans

574,810.

Fixed assets

206,159

Investments

121,287

Deposits

37,738

Customer lists

500,000

Website

80,000

Goodwill

2,323,010

Total assets

$

4,230,481

Accounts payable

$

1,265,693

Accrued expenses

403,000

Notes and loans payable

665,607

Acquisition debt

196,400

Contingent consideration

1,262,000

Stock given at closing

491,000

Total liabilities assumed and consideration given

$

4,230,481

Pro forma results of operations for the years ended December 31, 2010 and 2009 as though this acquisition had taken place at January 1, 2009 are as follows:

Years ended December 31,

2009

2010

Revenues

$

3,886,692

$

5,512,174

Net income(loss)

$

(1,881,925

)

$

(944,653

)

EPS

$

(0.03

)

$

(0.01

)

The pro forma results for the three and nine months ended September 30, 2010 as though HighCom was acquired on January 1, 2010 are as follows:

Three months ended September 30, 2010

Nine months ended September 30, 2010

Revenues

124,729

5,050,241

Operating expenses

344,309

1,840,088

Net income (loss)

(392,778

)

(758,538

)

The unaudited pro forma results disclosed in the tables above are based on various assumptions and are not necessarily indicative of the results of operations that would have occurred had the Company completed this acquisition on January 1, 2009 or 2010.

16

(11) Related Party Transactions

Phoenix Alliance Corporation (“Phoenix”), owned by one of our board members Andrew McKinnon, was engaged in April 2011 by BlastGard to operate as an independent contractor for all HighCom sales. Phoenix has set up a sales operation complete with telephone sales system and will cover all associated costs from daily operating expenses i.e. payroll costs, health costs, advertising and marketing costs, tradeshow costs etc. BlastGard’s COO Michael Bundy provided initial training to all independent contractors, including an overview process for regulatory compliance. BlastGard has agreed to assist Phoenix with initial start-up costs of $7,500 per month for 3 months and an implementation fee of $5,000 for an additional 3 months. At the completion of the first six months, Phoenix becomes entirely a performance based operation. The commission structure is based on sales generated and margins of HighCom’s product line.

Phoenix received commissions of $3,372 during the three months and nine months ended September 30, 2011. The marketing agreement was terminated in favor of in-house marketing during the 3rd quarter 2011.

On June 16, 2011, James F. Gordon was notified in writing that his at-will month to month employment would be terminated but that Mr. Gordon could continue as an unpaid consultant entitled to a 10% commission for any MTR sales he generates on behalf of BlastGard.

(12) Subsequent Events

On November 10, 2011, the Company agreed to a financing agreement in the amount of $500,000 with an existing shareholder and creditor. The financing agreement consists of a convertible note and warrants. The note bears interest at 12% and is convertible at $0.01 per share. The warrants allow for 75,000,000 shares at $0.01 and expire in seven years. As a result of this financing agreement, all outstanding loans with this lender have had its conversion price lowered to $.01 per share. Also, the exercise price of all outstanding warrants with this lender have been reduced to $.01 per share and the term of the warrants have been extended to seven years from the closing date of this financing. A finder’s fee of 4,000,000 shares was agreed upon by the parties to be issued by the Company.

17

Item 2.

Management’s Plan of Operation

Statements contained herein that are not historical facts are forward-looking statements as that term is defined by the Private Securities Litigation Reform Act of 1995. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, the forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance and those actual results may differ materially from those in the forward-looking statements. Such risks and uncertainties include, without limitation: well-established competitors who have substantially greater financial resources and longer operating histories, regulatory delays or denials, ability to compete as a start-up company in a highly competitive market, and access to sources of capital.

The following discussion should be read in conjunction with the Company's financial statements and notes thereto included elsewhere in this Form 10-Q and in our Form 10-K for the fiscal year ended December 31, 2010. Except for the historical information contained herein, the discussion in this Form 10-Q contains certain forward looking statements that involve risks and uncertainties, such as statements of the Company's plans, objectives, expectations and intentions. The cautionary statements made in this Form 10-Q should be read as being applicable to all related forward-looking statements wherever they appear herein. The Company's actual results could differ materially from those discussed here.

The financial information furnished herein has not been audited by an independent accountant; however, in the opinion of management, all adjustments (only consisting of normal recurring accruals) necessary for a fair presentation of the results of operations for the three months and nine months ended September 30, 2011, have been included.

Summary

BlastGard International, Inc. is in the business of providing protection for individuals and property. We have developed and have been marketing BlastWrap products to protect people and property against explosive forces. We have recently acquired a 98.2% new subsidiary (HighCom Security, Inc.) that provides a wide range of security and personal protective gear. A description of each company can be found below and a description of our acquisition can be located under "Item 13" of our Form 10K for the fiscal year ended December 31, 2010. We believe that the products of the two companies have a certain synergy and that BlastGard International is poised to be a full service provider for defensive and protective product needs. The term "the Company" shall include BlastGard, HighCom and their subsidiaries unless the context indicates otherwise.

HighCom provides a wide range of security products and personal protective gear (including tactical armor) that are tailored and offer protection solutions to specific customer requirements. HighCom caters to local law enforcement agencies, correctional facilities and municipal authorities. Given the equipment and ballistic protection solutions provided by HighCom, compliance with the U.S. Department of Commerce, U.S. Department of State, U.S. Department of the Treasury and all other governmental agencies' regulations is a high priority. HighCom has sold its products in the defense and law enforcement sectors and is known for innovative technology, exceptional customer service and superior quality performance. We export our products throughout the world and have in the past sold products in Asia, Africa, Europe, Latin America and the Middle East. Many of our products are controlled for export purposes and we require end user details prior to all sales. Strict compliance with U.S. and International laws and regulations is mandatory.

As discussed under "Background of HighCom" under "Item 1"of our Form 10K for the fiscal year ended December 31, 2010. HighCom's sales revenues in 2008 are approximately $17 million. Revenues in 2009 suffered a large decrease largely attributable to a May 2009 fire in its Columbus, OH facility. This destructive fire caused significant disruption to HighCom operations which is forced to relocate to new premises to restart its manufacturing activities. The combination of decreased spending in law enforcement and homeland security sectors experienced by the industry, the US financial crisis and the destructive effects of the factory fire, revenues decreased to $4 million. In the second half of 2009, HighCom is able to reestablish its operations in OH and began to regain its market presence both with customers and vendors. The result of which is the receipt of a $6 million contract award through an open bid process for the supply of hard armor plates and soft armor vests to United Nations Peacekeeping Forces. This is the first UN contract won by HighCom as a prime contractor. Shipments under this contract began in late 2009 with the majority of the contract revenues scheduled to be earned in 2010. Reference is made to “Item 1” – Foreign Corrupt Practices Act of our Form 10K for the fiscal year ended December 31, 2010 for a discussion of material events that effected HighCom in fiscal 2010 and the first and second quarters of 2011.

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In March 2011, BlastGard’s management team officially assumed operational control of HighCom. Since this time we have accomplished a number of key compliance tasks and finalized manufacturing agreements with several key partners. As stated in the paragraph above, BlastGard has received official communication from the U.S. State Department that HighCom’s export authority has been reinstated. In addition to this, BlastGard has completed registration through both the Directorate of Defense Trade Controls as well as the Bureau of Industry and Security ("BSI"). The purpose of these registrations is to allow BlastGard control over the export management and compliance program moving forward. HighCom also completed their ISO certification which had been revoked under HighCom due to missed audits. BlastGard management has been able to complete an internal audit and management review, in addition to meeting with BSI for the external audit review and HighCom has been recommended for continuing ISO certification. On June 29, 2011, HighCom’s relationship with the United Nations is reestablished and one of the previously canceled contracts for $38,000 is reinstated. BlastGard has also made significant personnel changes within HighCom and restructuring of operating locations and costs. BlastGard is able to achieve a significant reduction in HighCom’s operating expenses in the second quarter of 2011.

Since the completion of our acquisition of HighCom, the Company has focused its employee time and capital resources primarily on the development of the business of HighCom. We expect future results of operations to show the benefits of these changes. Our results of operations for the nine months ended September 30, 2011 include revenues and expenses of HighCom Securities after January 25, 2011.

Results of Operations

Three months ended September 30, 2011 and 2010

For the three months ended September 30, 2011 and 2010, we recognized sales of $170,967 and $43,315 and a gross profit of $32,983and $12,150, respectively. Sales and gross profit increased due to the reestablishment of HighCom sales and a moderate sale of MTR’s.

Operating expenses for the three months ended September 30, 2011 and 2010 were $606,024 and $46,297, respectively. The increase is due in part to the addition of HighCom and approximately $90,000 in consulting and non-stock compensation.

Our net loss for the three months ended September 30, 2011 and 2010 were $(186,442) and $(63,719), respectively. Interest expense for 2011 includes $380,000 in amortization of debt discount. Our operating loss and interest expense was offset by approximately $830,000 in gains.

Nine months ended September 30, 2011 and 2010

For the nine months ended September 30, 2011 and 2010, we recognized sales of $194,260 and $87,698 and a gross profit of $34,145 and $22,114, respectively. Sales and gross profit increased due to the reestablishment of HighCom sales and a moderate sale of MTR’s..

For the nine months ended September 30, 2011 and 2010, our operating expenses were $1,522,377 and $251,776 respectively. The increase is due in part to the addition of HighCom and approximately $600,000 in consulting and non-stock compensation.

Our net loss for the nine months ended September 30, 2011 and 2010 were $(1,976,004) and $(283,452), respectively. Interest expense for 2011 includes $1,230,000 in amortization of debt discount. Our operating loss and interest expense was offset by approximately $840,000 in gains.

After we assumed operational control of HighCom Security, Inc. we spent two months re-acquiring the export license and updating our ISO and other certifications. We also analyzed the product catalog and reestablished our relationship with HighCom vendors and customers. We used to the down time to move and redesign our assembly facility to improve efficiency and train our new sales force. Sales in HighCom started restarted during the three months ended September 30, 2011. We believe that the product lines of BlastGard and HighCom have a synergy and will be accepted in the marketplace.

19

Various Product Lines Identified For BlastWrap® - We have Several Completed and Finished Products

We are currently manufacturing our core product, BlastWrap®, for sale in various forms to non-affiliated third-parties. The primary application for BlastWrap® is as an intermediate good for numerous civilian and military applications and uses.

Our technology is being customized for specific industries and applications. We have examined the various markets where explosions occur, selected targeted applications and focused on development of products for those businesses and agencies at risk. While designing finished products engineered with BlastWrap®, we have taken into account that some products must be portable, while others will remain at a fixed location. Some products have been designed to contain identified explosive agents, while others are designed to mitigate unidentified explosive threats. With these standards in mind, we have developed or are developing the following product lines to address the needs of customers and targeted markets:

·

Mitigated Bomb Receptacles and MBR Gard Cart;

·

Blast Mitigated Unit Load Device (“BMULD”) – LD3 Container;

·

Insensitive Munitions (IM) Weapons Container;

·

Mitigated Trash Receptacle; and

·

BlastGard Barrier System (“BBS”).

For a completed description of our completed and finished products of BlastGard, reference is made to Item 1 of our Form 10-K for the fiscal year ended December 31, 2010.

Various Product Lines Identified For HighCom® - We have Several Completed and Finished Products

HighCom provides a wide range of security products and personal protective gear (including tactical armor) that are tailored and offer protection solutions to specific customer requirements. HighCom caters to local law enforcement agencies, correctional facilities and municipal authorities. Given the equipment and ballistic protection solutions provided by HighCom, compliance with the U.S. Department of Commerce, U.S. Department of State, U.S. Department of the Treasury and all other governmental agencies' regulations is a high priority. HighCom has sold its products in the defense and law enforcement sectors and is known for innovative technology, exceptional customer service and superior quality performance.

Body armor is classified by the NIJ according to the level of protection it provides from various threats. The classifications are as follows:

Type II body armor – provides protection against many handgun threats, including many common smaller caliber pistols with standard pressure ammunition, and against many revolvers.

·

Type IIIA body armor- provides a higher level of protection and will generally protect against most pistol calibers including many law enforcement ammunitions, and against many higher poared revolvers.

·

Type III and IV body armor – provides protection against rifle rounds and are generally only used in tactical situations.

Manufactured products versus products supplied by third party vendors.

HighCom manufactures ballistic plates, ballistic shields and blankets. Hard armor plates are HighCom manufactured products which either carry our brand name or a private label. Our ballistic vests, ballistic helmets and EOD bomb suits and gear are currently manufactured and private labeled by third party vendors for us. Our soft arm vests are manufactured by one of two major suppliers and they either carry the supplier brand name or the HighCom brand name. Our UN soft armor vest is co-manufactured by us with a third party vendor. Our ballistic packs are also manufactured by one of two manufacturers. We distribute the following products made by other manufacturers: metal detectors, x-ray machines, EOD kits and detection devices, law enforcement gear, uniforms and other clothing, optics and communications. In the future, we intend to manufacture PASGT (personal armored systems for ground troops) and ACH (advanced combat helmets) ballistic helmets as well as EOD suits. For a complete description of the HighCom product line, reference is made to our Form 10-K for the fiscal year ended December 31, 2010.

Liquidity and Capital Resources.

At September 30, 2011, we had cash of $46,112, working capital of $(2,376,470), an accumulated deficit of $(15,644,336) and shareholder equity of $(1,109,104).

For the nine months ended September 30, 2011, net cash used in operating activities was $(736,856) primarily due to our net loss of $(1,976,004) offset by $1,231,000 in amortization, and various gains and non-cash expenses. During the nine months ended September 30, 2011, we used cash in investing activities for payment of deferred costs of $(13,759). During the nine months ended September 30 2011, we received $175,000 from the sale of stock and received $760,000 from issuing notes.

For the nine months ended September 30, 2010, net cash provided by operating activities was $19,629 primarily due to our net loss of $(283,452), partially offset by a $50,000 in stock based compensation and $270,613 increase in accounts payable. During the nine months ended September 30, 2010, we used cash in investing activities for payment of deferred costs of $(24,423). During the nine months ended September 30, 2010, we received $579 from our credit line.

At September 30, 2011, we had cash of $46,112 and we owed approximately $1,350,000 in principal and $76,451 in accrued interest to the holders of our Debt. We also owed payables of approximately $1,430,000.

21

We anticipate that our future liquidity requirements will arise from the need to finance our accounts receivable and inventories, and from the need to fund our growth from operations, current debt obligations and capital expenditures. The primary sources of funding for such requirements are expected to be cash generated from operations and raising additional capital from the sale of equity and/or debt securities. However, we can provide no assurances that we will be able to generate sufficient cash flow from operations and/or obtain additional financing on terms satisfactory to us, if at all, to remain a going concern. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis and ultimately to attain profitability. The Company is attempting to obtain cash to finance its operations through the sale of equity, debt borrowing and/or through the receipt of product licensing fees. We can provide no assurances that financing will be available to us on terms satisfactory to us, if at all, or that we will be able to continue as a going concern. Further, we can provide no assurances that a mutually acceptable licensing agreement will be entered into on terms satisfactory to us, if at all. In this respect, see “Note 1 – Going Concern” in our financial statements for additional information as to the possibility that we may not be able to continue as a “going concern.”

To date, we have relied on management’s ability to raise capital through equity private placement financings to fund our operations. We estimate that we will require between $3.0 million and $3.5 million in additional financing and cash flow from operations to support our operations and to meet our debt obligations as they become due and payable over the next 15 months of operations. We can provide no assurances that cash generated from operations will occur or additional financing will be obtained on terms satisfactory to us, if at all, or that additional debt conversions will occur.

The Company is seeking financing. Our Agreements with the current Note holder states that in the event of default, change in control, change in a majority of directors and in the most recent Note investments of $800,000, a change in CEO would trigger a mandatory redemption of the Notes at 120% of the balance of the Notes and a buy out of their Warrants based upon a valuation of the Warrants as provided in the Agreement, which could be substantial.

Recent Developments - 2011 Debt

Alpha Capital Aktiengesellschaft, a holder of 2004 Debt, loaned us $160,000 in February 2011and an additional $300,000 in March 2011 pursuant to secured notes convertible at the lesser of the applicable conversion price oreighty percent of the conversion price of any convertible note issued by the Company to anyone prior to or on the one year anniversary of the Issue Date of the Note, subject to adjustment as described therein. The February 2011 notes had a conversion price of $.03 per share and the March 2011 notes had a conversion price of $.05 per share. On June 17, 2011, we entered into an agreement with Alpha to borrow an aggregate principal amount of $300,000 and to issue to the investor a secured convertible note and common stock purchase warrant. The closing occurred on June 17, 2011. The note bears an interest rate of 10% per annum, with a default interest rate of 15% per annum. Alpha also has the right, at their option, to convert the principal amount of the note, together with all accrued interest into fully paid and non-assessable shares of our common stock at a conversion price per share of (i) $0.03, or (ii) eighty percent of the conversion price of any convertible note issued by the Company to anyone prior to or on the one year anniversary of the Issue Date of the Note. Also in connection with this sale, we issued Alpha a warrant to acquire shares of our common stock. We issued to the investor a “Class A” Common Stock Purchase Warrant which entitles the investor to acquire an aggregate of 12,333,335 shares of our common stock at an exercise price of $0.06 per share exercisable for a period of five years.

The documents for the June 2011 Note also reduced the conversion price on the March 2011 Note from $.05 to $.03 per share.

Each note bears an interest rate of 10% per annum, with a default interest rate of 15% per annum. Interest shall be payable quarterly in arrears on the last day of each calendar quarter commencing March 31, 2011, with a maturity date of August 31, 2011 in the case of the February 2011 issued note and a maturity date of March 3, 2012 in the case of the March 2011 issued note. The individual note holder has the right, at its option, to convert the principal amount of each note, together with all accrued interest thereon in accordance with the provisions of and upon satisfaction of the conditions contained in each note, into fully paid and non-assessable shares of our common stock at a conversion price per share as described above, subject to adjustment in certain circumstances if the notes are then outstanding, such as a stock split, combination or dividend; or in the event we issue shares of common stock for consideration of less than the exercise price. Each note is secured by all of the assets of BlastGard International, Inc, and its wholly-owned subsidiary, BlastGard Technologies, Inc., until the notes have been fully paid or fully converted into common stock. Also in connection with these transactions, we issued the note holder warrants to acquire up to 29.3 million shares of our common stock at prices ranging from $0.03 per share to $0.08 per share, subject to anti-dilution protection over the life of the warrants. Of the 29.3 million shares purchasable upon exercise of the warrants, warrants to purchase 8 million common shares exercisable at $0.03 per share expire on February 3, 2016, warrants to purchase 9 million common shares, exercisable at $0.08 per share terminate on March 7, 2016 and warrants to purchase 12,3 million common shares, exercisable at $0.06 per share terminate on June 15, 2016.

22

On November 8, 2011, the Company agreed to a financing agreement in the amount of $500,000 with an existing shareholder and creditor. The financing agreement consists of a convertible note and warrants. The note bears interest at 12% and is convertible at $0.01 per share. The warrants allow for 75,000,000 shares at $0.01 and expire in seven years. As a result of this financing agreement, all outstanding loans with this lender have had its conversion price lowered to $.01 per share. Also, the exercise price of all outstanding warrants with this lender have been reduced to $.01 per share and the term of the warrants have been extended to seven years from the closing date of this financing. A finder’s fee of 4,000,000 shares was agreed upon by the parties to be issued by the Company

Purchase of HighCom Security Inc.

As previously reported, on January 25, 2011, BlastGard International, Inc. ("BlastGard") entered into a binding Letter of Intent (“LOI”) with HighCom Security, Inc. (“HighCom”) under which BlastGard will acquire 100% of the common stock of HighCom from the stockholders of HighCom, none of whom are affiliates of BlastGard. HighCom is a worldwide security equipment provider based in San Francisco, California. HighCom designs, manufactures and distributes a unique range of security products and personal protective gear. BlastGard and HighCom have agreed to consummate a Stock Purchase Agreement, subject to the approval of all necessary parties, agencies or regulatory organizations. As of the signing of the agreement, BlastGard immediately assumed the operations of HighCom and started to provide financing for the operations while a definitive agreement is drawn up over the next 90 days.

As stated above, the LOI contemplated several closing conditions and the closing in escrow with a possible of rescission if the State Department does not reinstate HighCom’s export license. On March 4, 2011, among other changes the LOI is amended as follows: 1) the LOI constitutes the definitive stock purchase agreement; 2) BlastGard issued 9,820,666 shares of its Common Stock and promissory notes totaling $196,400 to Robert Rimberg as trustee for an Irrevocable Trust FBO and Yochi Cohen and his wife, Yocheved Cohen–Charash (the "Trust") in exchange for 1,150 shares of the outstanding 1,171 shares of HighCom Common Stock, equivalent to 98.2% of the outstanding shares; 3) the parties agree to waive all closing conditions, escrow provisions and right of rescission; and 4) BGI agreed for a period of 30 days to offer to purchase Ron Peled 21 shares of HighCom from him or his transferee at a cost of 179,934 shares of BGI Common Stock and in exchange for promissory notes totaling $3,600, with terms identical to those received by the Trust plus 1.8% of the Earn-out provisions contained in the LOI.

BlastGard also agreed to an earn-out consisting of up to $100,000 in cash and up to 35,000,000 shares of common stock based on a pro-rata basis if revenue reaches certain goals. BlastGard management believes that the revenues goals are very achievable and have valued the contingent consideration at 68% of the market price at the time of the agreement.

HighCom Sales were under the direction of Phoenix Alliance Corporation

Phoenix Alliance Corporation (“Phoenix”), owned by one of our board members Andrew McKinnon, was engaged in April 2011 by BlastGard to operate as an independent contractor for all HighCom sales. Phoenix had set up a sales operation complete with telephone sales system and agreed to cover all associated costs from daily operating expenses i.e. payroll costs, health costs, advertising and marketing costs, tradeshow costs, etc. BlastGard’s COO Michael Bundy provided initial training to all independent contractors, including an overview process for regulatory compliance. BlastGard agreed to assist Phoenix with initial start-up costs of $7,500 per month for 3 months and an implementation fee of $5,000 for an additional 3 months. At the completion of the first six months, Phoenix would be entirely a performance based operation. The commission structure was based on sales generated and margins of HighCom’s product line. However, as of August 31, 2011, HighCom sales are now being overseen by our COO and CEO. Commissions paid to date to Phoenix or accrued for the three months ended September 30, 2011 was $3,321.

23

Recently Issued Accounting Pronouncements

During the past two years, the Financial Accounting Standards Board (“FASB”) issued a number of new pronouncements, which are described in Note 1, “Recent Accounting Pronouncements” of the Notes to Financial Statements contained in our latest annual report on Form 10-K filed with the Security and Exchange commission on April 14, 2011. Reference is made to these recent accounting pronouncements as if they are set forth therein in their entirety.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. Our primary exposure to market risk is interest rate risk associated with our short term money market investments. The Company does not have any financial instruments held for trading or other speculative purposes and does not invest in derivative financial instruments, interest rate swaps or other investments that alter interest rate exposure. The Company does not have any credit facilities with variable interest rates.

Item 4.

Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 13a-15(e). In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and the Company's Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective at the reasonable assurance level at the end of our most recent quarter. There have been no changes in the Company's disclosure controls and procedures or in other factors that could affect the disclosure controls subsequent to the date the Company completed its evaluation. Therefore, no corrective actions are taken.

PART II – OTHER INFORMATION

Item 1.

Legal Proceedings.

We are currently not subject to any threatened or pending legal proceedings. Nevertheless, we may from time to time become a party to various legal proceedings arising in the ordinary course of our business.

Item 1A.

Risk Factors

As a Smaller Reporting Company as defined Rule 12b-2 of the Exchange Act and in item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item 1A.

24

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

(a)

From January 2011 to September 30, 2011, we had no sales or issuances of unregistered securities, except we made sales or issuances of unregistered securities listed in the table below:

(1) In December 2010, the board approved an exchange for $50,000 and services rendered the issuance of preferred stock convertible into 5,000,000 shares to an entity affiliated with Andrew McKinnon, a director. Subsequently, as the payment is received by BlastGard and the services are performed by the affiliated entity, the Company issued the underlying common shares in lieu of the Preferred Stock with the consent of the affiliated entity.

(2) These notes are issued together with Common Stock Purchase Warrants to purchase 8,000,000 shares of Common Stock at an exercise price of $.03 per share through February 3, 2016. The notes are convertible at $.03 per share.

(3) The notes are issued together with Common Stock Purchase Warrants to purchase 9,000,000 shares of Common Stock at an exercise price of $.08 per share through March 7, 2016. The notes are convertible at $.05 per share; however, the conversion price of the notes has been reduced to $.03 per share due to the Jun 2011 transaction.

(4) The notes are issued together with Common Stock Purchase Warrants to purchase 12,333,335 shares of Common Stock at an exercise price of $.06 per share through June 2016. The notes are convertible at $.03 per share.

(b) Rule 463 of the Securities Act is not applicable to the Company.

(c) In the nine months ended September 30, 2011, there are no repurchases by the Company of its CommonStock.

Item 3.

Defaults Upon Senior Securities.

None

Item 4.

Reserved.

Item 5.

Other Information.

In October 2011, the Company had a Board meeting and Keith Brill and Solomon Mayer were appointed to the board of directors.

Item 6.

Exhibits

Except for the exhibits listed below, other required exhibits have been previously filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.

Exhibit Number

Description

3.1

The Company’s Articles of Incorporation, as amended and currently in effect. (Incorporated by reference to Exhibit 3.7 to the Company’s quarterly report on Form 10-QSB dated March 31, 2004).

3.2

The Company’s Bylaws, as amended and currently in effect. (Incorporated by reference to Exhibit 3.8 to the Company’s quarterly report on Form 10-QSB dated March 31, 2004).

3.3

Amendments to Articles of Incorporation, as amended and currently in effect. (Incorporated by reference to Form 8-K date of earliest event July 29, 2011, filed with the SEC on August 2, 2011).

3.4

Election of Directors (Incorporated by reference to Form 8-K date of earliest event October 25, 2011, filed with the SEC on October 28, 2011.

4.01

Form of Subscription Agreement between the Company and the named investor dated November 8, 2011*

4.02

Form of Secured Convertible Promissory Note issued to the named investor dated November 8, 2011*

4.03

Form of Class A Common Stock Purchase Warrant dated November 8, 2011*

4.04

Form of Escrow Agreement dated November 8, 2011*

11.1

Statement re: computation of earnings per share. See condensed consolidated statement of operations and notes thereto.

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